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2 Introduction to FFI  Freight Forward Europe (FFE) created in 1994 - Freight Forward International (FFI) since 1/1/2004  Interest group of nine of the leading global freight forwarders & logistics providers  Employ more than 210,000 people  Transport more than 5 million tons air and 5 million teu ocean  Turnover of more than 37.7 billion Euro  30% of the Forwarding market worldwide Kuehne + Nagel

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4 customs clearance NOTES:  Within GeoLogistics, data transfer is standard. Customs in every country is different, but sorted out at destination.  Some Customs are paperless which speeds the transaction, but requires EDI Commercial Invoices.

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6 Security pre-alerts NOTES:  So we create quality departments at destination. These have to operate 24/7.  So while AMS & ACI are paperless, they are very labour intensive.  Note: being compulsory, they were implemented in very short time.

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7 EDI with Carriers NOTES:  EDI supplements paper, it does not replace it.  So audit trails are not rigorous and poor data integrity is tolerated.  The benefits are uneven, and not strong enough to drive rapid deployment.

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8 EDI with Shippers NOTES:  EDI between shippers and their forwarders is happening. But the development is very slow.  Until this becomes commonplace, we do not have true paperless trade in the international supply chain.

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9 Security considerations  Fraud through forged and incorrect documentation harms consignees, government revenues, forwarders, and the public:  Estimated Euro 3 - 8 Billion Fraud in EU Transit Movements in mid 1990’s due to forged documents in old paper Old Transit System*. (Evidence is that EU “New Computerised Transit System” has largely eradicated this particular Fraud.)  Unquantified global fraud through forged paper Certificates of Origin should also be eradicated through paperless trading.  But with Electronic Trade there is a Security and Fraud risk from:  Hackers accessing electronic systems or portals within the supply chain.  Unauthorised diversion of sensitive data.  Physical Security is improved by good track & trace (knowing where the goods are and where they are meant to be). This benefits:  The owners of the goods.  Governmental security. * Source - EU Parliament Committee of Enquiry Report

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11 examples of “not done right” :  AMS & ACI are different creating additional work and cost.  EDI with airlines is supplementary to paper, so more work & cost.  Customs clearance in many countries is only finalised when paper copies are delivered.  Carriers refuse to sign Non-disclosure Agreements [and do not act to protect data], thus increasing security & fraud risks.  Forwarders are too slow to develop paperless processes with shippers. Re-keying leads to more work and data integrity problems downstream. Result: the benefits of paperless trade are only partially gained:  The supply chain is less efficient and less secure than it should be.  Costs are shuffled along the chain, not eliminated.

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12 What have we learned?  Governments have the power to make things happen much more quickly.  Governments can make the supply chain less efficient by failing to co- ordinate on a multinational basis or between national agencies.  Making one transaction paperless does not improve the whole supply chain – it merely moves the bottleneck (and costs) along the chain.  Commercially driven developments have not shown sufficient benefits for all parties to allow speedy development.  Data integrity and audit trails are essential at every stage.  There are new risks for forwarders:  Potential liability for Customs debt, and possible criminal proceedings, for submitting Electronic Data as Agents on behalf of the real Principles.  Hackers into any system within the supply chain.  Disclosure of commercially sensitive data.

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14 Freight Forwarding International Vision  FFI is uniquely placed, ready, and eager to work in global partnership with all parties to provide an International Supply Chain that has the optimum efficiency and security for all.  This will only happen with closer co-operation between global Customs Administrations, OGA’s and legitimate trade experts.  FFI is actively participating in the EU “Trade Contact Group” and is in regular contact with US CBP and WCO, advocating the items on the previous slide.

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